Which of the following is true about output contracts?
A)It cannot contain the best-efforts clause.
B)It provides the seller with reduced selling costs.
C)It assures the purchaser that the seller will use their best efforts to achieve the contract's objective.
D)It assures the seller of a purchaser for all its outputs.

Question

Quizplus · Accepted Answer

Output contracts assure the seller of a purchaser for all their outputs. This type of contract is commonly used in industries where the seller has a steady production and the purchaser needs a continuous supply. It also reduces the seller's selling costs as they have a guaranteed buyer. The best-efforts clause is commonly used in requirement contracts, not output contracts. Output contracts do not require the seller to use their best efforts to achieve the contract's objective because the objective is simply to sell all the outputs.

Which of the Following Is True About Output Contracts